First the good news: Egypt’s foreign reserves ticked up to $16.87 billion at the end of September – enough to comfortably cover imports for more than three months as the country’s economy strengthens and foreign investors continue to buy Cairo-listed stocks.

But the Arab country–slowly recovering from a tumultuous past few years that left its economy in tatters and FX reserves sharply depleted–faces some stiff challenges in the coming months.

To start with, it apparently needs to pay Qatar back some $3 billion of crisis-era deposits by November. That could sharply erode Egypt’s reserves, unless of course Qatar extends the tenure of these loans, or its Arab Gulf neighbours such as Saudi Arabia and the U.A.E. step in to cover the repayments.

Egypt however remains largely dependent on foreign aid as foreign inflows, while improving, are still not enough to finance an expected economic recovery. Already, there are signs of increasing demand for foreign exchange from local businesses as activity picks up.

“Gulf aid has been able to paper over some of the cracks, but the longer term return to growth needs to be underpinned by foreign direct investment,” said Sherif Salem, a portfolio manager at Abu Dhabi-based Invest AD. “Much will depend on the government’s ability to attract much-needed FDI,” he added.

To that extent, a so-called ‘Friends of Egypt’ conference scheduled to take place in the first quarter will draw a lot of attention.

Egypt plans to offer projects worth tens of billions of dollars to foreigners, hoping to attract investments that will not only boost its reserves but also catalyse the economy and help create jobs for its vast population.

Going by recent activity in Egypt’s stock market, up some 40% this year, foreign investors have clearly grown more comfortable with the political and economic environment, analysts say, but warn that high unemployment and inflation mean that fresh social unrest is still a risk.